Key Takeaways
- President Trump invoked the Defense Production Act to secure domestic supplies of elemental phosphorus and glyphosate-based herbicides, citing critical risks to the U.S. military and food supply.
- Canada and Mexico have officially declined to discuss bilateral "contingency plans" with the U.S., instead presenting a united front to preserve the trilateral USMCA framework.
- Minister Dominic LeBlanc is leading Canada's largest-ever trade mission to Mexico, involving over 240 organizations and 370 delegates to deepen commercial ties.
- The White House order specifically targets supply chain vulnerabilities for Bayer (BAYRY), the sole U.S. producer of glyphosate, amid mounting legal and regulatory pressures.
- Two-way trade between Canada and Mexico has surged to $56 billion, a twelvefold increase since 1993, highlighting the growing importance of the "non-U.S." North American corridor.
Trump Invokes Defense Powers for Phosphorus and Herbicides
In a significant move for industrial and agricultural policy, President Trump signed an executive order on Wednesday to ensure an adequate supply of elemental phosphorus and glyphosate-based herbicides. The order finds that any interruption in the supply of these materials would leave the U.S. defense industrial base and food supply vulnerable to "hostile foreign actors."
Elemental phosphorus is a dual-use material essential for military munitions, semiconductors, and lithium-ion batteries, while also serving as a precursor for glyphosate. The order instructs Agriculture Secretary Brooke Rollins to prioritize domestic production, a move that directly impacts major players like Nutrien (NTR) and The Mosaic Company (MOS), which dominate the North American phosphate market.
The directive comes as Bayer (BAYRY), the only domestic manufacturer of glyphosate, faces a "pivotal year" of litigation and potential supply constraints. By designating these chemicals as critical to national defense, the administration aims to shield the production of corn, soy, and cotton—over 90% of which rely on these herbicides—from global supply shocks.
Canada and Mexico Reject Bilateral Trade Paths
While the White House focuses on domestic supply chains, Canadian Minister Dominic LeBlanc confirmed that Canada has not discussed any bilateral "Plan B" with Mexico should the U.S. attempt to split the USMCA agreement. Speaking from Mexico City, LeBlanc emphasized that both nations share a "singular interest" in maintaining a trilateral trade deal and removing U.S. sectoral tariffs on steel and aluminum.
LeBlanc expressed confidence in the willingness of Mexico’s Economy Secretary, Marcelo Ebrard, to ensure the upcoming USMCA review leads to a renewed three-way partnership. This unified stance serves as a direct rebuttal to suggestions from U.S. Trade Representative Jamieson Greer regarding separate negotiations with each neighbor.
The diplomatic push is backed by a massive "Team Canada" trade mission, the largest in the country's history. Canadian companies from all 10 provinces have already signed new commercial partnerships in Mexico, targeting sectors such as advanced manufacturing, clean energy, and ag-tech.
Strengthening the "Other" North American Corridor
The deepening relationship between Ottawa and Mexico City reflects a strategic shift as both nations navigate 35% tariffs and trade threats from the Trump administration. Under the USMCA, Canadian investment in Mexico has tripled over the last decade, and Mexico recently overtook Canada as the United States' top trading partner.
Minister LeBlanc noted that the economic relationship between Canada and Mexico has multiplied twelvefold in 30 years, growing proportionally faster than their respective trade with the U.S. This growth is being formalized through a new Canada-Mexico Comprehensive Strategic Partnership, which includes joint initiatives on critical minerals and port infrastructure.
As the formal USMCA review approaches this summer, the "united front" strategy aims to leverage the integrated nature of North American supply chains. By aligning their interests, Canada and Mexico hope to force a trilateral resolution that protects the $56 billion in annual trade currently flowing between the two nations.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.